Government Employment Changes Little as Job Growth Slows

The U.S. economy added only 88,000 jobs last month, far below economists' expectations.

Job growth appears to have slowed significantly last month as employers added fewer jobs and more discouraged workers left the labor force.

The U.S. economy added only 88,000 jobs in March, compared to 268,000 jobs in February, according to updated U.S. Labor Department estimates released Friday. The tally was less than half of economists’ agreed-upon expectations for the month.

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Perhaps the most troublesome finding of the bleak jobs report was the large drop in the number of workers employed or actively looking for work. The labor force shrank by 496,000 for the month, causing the participation rate to dip 0.2 percent to 63.3 percent. Those who stopped their search for work explain part of the decline. But it’s also important to keep in mind that more people are retiring as the population , particularly baby boomers, age.

The smaller labor force helped push down the national jobless rate from 7.7 percent to 7.6 percent.

While the jobs report was weak, the estimates are preliminary and are not yet indicative of any longer-term trends.

It’s also too early to tell what effects sequestration will have on federal government employment. Few agencies have implemented layoffs or furloughs at this point, and many are waiting to see what (if any) action Congress takes.

Federal employment did decrease 14,000 last month, but nearly all the cuts were incurred by the U.S. Postal Service, according to Labor Department estimates.

State and local employment has fluctuated little in recent months. Previous job estimates for January and February were revised up for both sectors, though.

Public colleges and universities added more than 8,000 jobs in March, while other areas of state government employment remained virtually unchanged.

Similarly, total local government employment didn't change much, declining 2,000 for the month.